By Monika Lacey, Chief Operating Officer

Over time, your business will have been building up a credit score. This is a number that summarises your credit history which can include payment history with other businesses and organisations in New Zealand.

Your business credit score comes from a wide-range of sources and is designed to provide a snapshot of your businesses creditworthiness. The score helps other businesses quickly evaluate whether to do business with you, based on your ability to pay your bills on time. 

Credit scores range between 0 – 1000 – the higher the score, the lower the risk. The table below shows how credit scores are grouped into ranges of risk.

It’s important to build and maintain  a high business credit score for your company to gain access to finance, and to be able to receive goods and services on credit.

Improving your credit score

The simplest way to improve your business credit score is to pay your bills on time. That is, before the due date specified by each supplier, rather than according to a fixed monthly schedule for all bills received. Running payments weekly according to due date can help to reduce the chance of incurring late payments. 

What impacts your business credit score?

Late or missed payments can negatively impact your business credit score, which other businesses will use to quickly evaluate whether or not to do business with you. A low credit score signals that your business is at risk of defaulting on payments, while a high score indicates your company is in good financial health and will be able to service any debts. 

If you have any disputed charges, try to negotiate an agreement as soon as they arise, to avoid any serious issues arising. If for any reason you have a cashflow disruption, try to negotiate extended payment terms with suppliers upfront to reduce any impact on your score. 

Applying for several streams of credit frequently over a short period will also impact your business credit score, as this is a sign you may be unable to finance your business operations. Planning ahead before applying for business finance can help to minimise your applications for credit.

What’s my business credit score?

Centrix Business Reports contain comprehensive financial information about your business from a wide range of sources. Your credit score is a summary of the information in the report, designed to provide a snapshot of creditworthiness. 

To find out your business credit score get a Centrix Business Credit Report here.

Get credit reports online

To get a credit report and access the credit score and creditworthiness rating of a person or business before extending credit, visit https://www.centrix.co.nz/get-reports/

Every business has a credit score – the higher the score, the greater your cashflow protection.